Power network owner AusNet Services has joined with retailer EnergyAustralia to deliver Victoria's first grid-scale electricity storage project, located at a bottleneck in the transmission grid in north-west Victoria, where a surge in renewable energy generation is raising concerns about grid stability.

The 30-megawatt unit, with the equivalent capacity of 6000 household batteries, is thought to be the first standalone grid-scale storage project in the country and the first to be owned by a transmission company. It was one of two battery projects in regional Victoria announced in March by then federal energy minister Josh Frydenberg, involving up to $25 million from each of the state government and the Australian Renewable Energy Agency.

Now in the final stage of testing, the $35 million project has also involved Spotless Downer as the construction contractor, while global battery services provider Fluence supplied the storage technology and will provide operational services.

The battery is expected to relieve congestion on Victoria's power transmission grid and store low-cost renewable energy generation that otherwise may not have been used. It is also intended to help with security of supply for Melbourne during peak demand, and help stabilise the grid.

"This system should enable more renewables to be able to be integrated," said Mark Leslie, managing director of Fluence in Asia-Pacific. He said it could provide "virtual capacity" on the transmission line, allowing excess renewable energy generation to be absorbed when solar and wind plants are running flat out, and feeding it back into the grid during peak times.

Mr Leslie said that for a fully commercial project able to be developed in the national electricity market without government funding some regulatory changes would be required to provide additional revenues through pay-for-performance type programs or through the development of a market for "fast frequency response" services.

"Ideally with that kind of fast frequency response market regulatory change, these batteries could be much more commercial," he said.

The Ballarat venture is sited at a critical junction on the transmission network to help beef up the grid and reduce the need for new gas power stations to fill in the gaps between renewable generation.